This 2006 Article IV Consultation highlights that following a vigorous expansion in recent years, a cyclical slowing in New Zealand's economy commenced in 2005, with growth declining to 21/4 percent. Economic growth had averaged 41/4 percent annually in 2002-04, with domestic demand boosted by large migration inflows, wealth effects from rising housing prices, and income effects from high commodity prices. With slower growth easing resource pressures, inflation is expected to moderate, allowing an eventual easing in monetary policy.